General Indemnity Agreement

[Bond Magician]

I am about to sign a general indemnity agreement. Without reading it word for word, can you summarize what this document is?

[Surety Queen]

I am about to sign a general indemnity agreement. Without reading it word for word, can you summarize what this document is?

An Indemnity Agreement is sort of like a contract that you sign with the Surety Company who is writing your bond. It states that you will operate your business according to the rules and regulations of the state in which you are bonded.

You are agreeing to hold the surety harmless from loss that arises from their issuance of that bond. This amount could include not only the bond amount but also legal fees expended for defense or prosecution of the claim. Depending upon the type of surety bonds written, there may be an agreement to allow the bond company to take over equipment needed to complete bonded work. There's an obligation to allow the surety access to books and records. It's a very comprehensive, complicated agreement that you must read, and if you don't understand anything, you must seek counsel from an attorney. Despite all the verbiage, the agreement comes into play only when the principal (the bonded entity) fails to fulfill the obligation, either intentionally or inadvertently. Bond companies give their principals every opportunity to satisfy legitimate claims, but they do expect to be held harmless. I urge you to read the agreement and seek legal input with any questions you have. Your agent should be a good source of advice, too.